How does appraisal value of a home help you when you are trying to refinance?

Question

Example: I buy home for $500,000 on an interest-only bridge loan (owner financing) for a period of 3 years (have to get it financed by another lender at end of 3 years), and have $60,000 to put down on the refinance at the end of 3 years. This leaves $440,000 to get financed after 3 years. If the house is appraised at $540,000 at that time, does the bank look at it like they are really approving me for financing in the amount of $300,000 rather than $440,000 since I have $140,000 in equity?

Answer 1

Let’s say you owe $500K at the time you want to refinance, and the home is then worth $540K – which would be determined by your lender’s appraisal.

If you put $60K towards your owed amount, you would now have a loan for $440K.

You don’t have $140K in equity; you have $100K.

Answer 2

They will look at your LTV.  They will use the appraised value at the time of the refi & the amount of the new loan to get the LTV.  Hope this is what you are asking.  I got a little confused with the question.